Kip McGrath Education Centres Insiders Benefit From Selling Stock At AU$0.40

Although Kip McGrath Education Centres Limited (ASX:KME) shareholders have enjoyed a great week with the stock up 28%, insiders who sold stock over the past year haven't fared as well. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Kip McGrath Education Centres

In the last twelve months, the biggest single sale by an insider was when the MD & CEO, Storm McGrath, sold AU$402k worth of shares at a price of AU$0.40 per share. That means that an insider was selling shares at slightly below the current price (AU$0.50). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 17% of Storm McGrath's holding. Storm McGrath was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 570.00k shares for AU$242k. But insiders sold 1.00m shares worth AU$402k. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Kip McGrath Education Centres

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Kip McGrath Education Centres Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 15% of Kip McGrath Education Centres shares, worth about AU$4.3m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Kip McGrath Education Centres Insiders?

The fact that there have been no Kip McGrath Education Centres insider transactions recently certainly doesn't bother us. Our analysis of Kip McGrath Education Centres insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kip McGrath Education Centres. To that end, you should learn about the 2 warning signs we've spotted with Kip McGrath Education Centres (including 1 which can't be ignored).

But note: Kip McGrath Education Centres may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.